KLM Royal Dutch Airlines
- CAPA Analysis
- Schedule Analysis
- Cargo Analysis
- Route Maps
- US Route Data
- Fast Fact Report
- IATA Code
- ICAO Code
- Corporate Address
- KLM Royal Dutch Airlines
P.O. Box 7700
1117 ZL Schiphol
- Main hub
- Amsterdam Schiphol Airport
- Business model
- Full Service Carrier
- Domestic | International
- Airline Group
- Part of Air France-KLM S.A.
- Joined Alliance
- Association Membership
- Codeshare Partners
- Aer Lingus
Air Europa Lineas Aereas
China Eastern Airlines
China Southern Airlines
CSA Czech Airlines
Delta Air Lines
Rossiya - Russian Airlines
Ukraine International Airlines
Based in Amsterdam, KLM is the national airline of the Netherlands. Part of the Air France-KLM Group, KLM operates an extensive network which includes services within Europe and to Asia, Africa, North America, Central and South America and the Middle East. KLM is a founding member of the SkyTeam alliance.
Location of KLM Royal Dutch Airlines main hub (Amsterdam Schiphol Airport)
2,200 total articles
204 total articles
Europe's airlines: 1H2014 results season shows improving trend, but cost reduction is the key driver
Europe's airlines appear to be following a course to improved profitability, based on the 1H2014 results of the largest publicly quoted airline groups. Profits remain slender in most cases, but margins are improving in aggregate. Individually, financial performance varied widely, with LCCs both leading (Ryanair) and lagging (Norwegian) the operating profit margin rankings in 1H2014.
The European market offers volume growth, but is characterised by price pressure, with RASK falling for the majority of the larger airline groups and this points to the need for additional caution in capacity growth. The LCCs collectively enjoyed higher growth than the FSCs in 1H2014 and also achieved a more stable RASK performance (although not in all cases).
Profit improvement is largely being achieved through cost savings and CASK reduction. Although fuel prices are high on a longer term historic perspective, they are enjoying a period of relative stability and this has helped the cost picture. Although Europe's airline sector remains only thinly profitable, these 1H results hold out the prospect of better full year results in 2014 versus 2013.
Time has provided clarity for China Eastern Airlines. The failed 2007 bid of Singapore Airlines to purchase a stake in China Eastern Airlines left the Shanghai-based carrier with a sour taste as it lost the chance to find a partial solution to its weak performance and dwindling finances. Although at the time China Eastern threw its support behind the deal, which was derailed by competitors Air China and ultimately Cathay Pacific, in hindsight China Eastern may be glad the agreement did not go through.
Singapore Airlines was buying into China Eastern when it was weak; today China Eastern is stronger and is also more profitable than Singapore Airlines. China Eastern now worries SIA would have gained more than it put in.
These considerations are important as China Eastern continues to seek a strategic investor. China Eastern sees that quality must complement its size and an international partner could best help its internalisation. China Eastern is weary of an Asian airline investing in it but perhaps paradoxically wants an investment to mesh culturally.
International Airlines Group (IAG)'s 2Q2014 results revealed another strong improvement and 1H2014 recorded the first positive operating result for IAG since 2011. Unit revenues were under pressure and so the profit improvement was achieved by unit cost reductions.
All three of IAG's operating airlines - British Airways, Iberia and Vueling - improved their 2Q operating profit year on year, with BA and Iberia also recording higher margins.
Recognising the progress made by Iberia, which returned to operating profit in 2Q and 1H, IAG has announced that the Spanish airline will see 16 new wide bodies enter its fleet from 2015 to 2020 to replace A340 aircraft. A year ago, CAPA suggested that IAG might have reached a turning point. Its results since then, and its reiteration of its profit targets, appear to confirm that this was the case as it has outperformed its major European rivals Lufthansa and Air France-KLM.
Air France-KLM's recovery continued with another year on year improvement in quarterly results in 2Q2014, mainly because it cut unit costs more quickly than the fall in unit revenues. Following its early Jul-2014 profit warning, it has made no further changes to its FY2014 EBITDA target, which remains EUR2.2-2.3 billion, and it continues to target net debt of EUR4.5 billion at the end of 2015 (versus EUR5.4 billion at the end of Jun-2014).
On the strategic front, Air France-KLM is accelerating the growth of its Transavia LCC subsidiary, although this unit is still loss-making, and is re-grouping its Air France point to point and Hop regional operations into a single business unit. In addition, it is examining further reductions to its full-freighter fleet, beyond those previously announced.
Air France-KLM is also working on its next five year strategic plan, to follow its Transform 2015 restructuring plan. To be unveiled in Sep-2014, the "Perform 2020" plan will focus on growth and competitiveness.
Delta Air Lines recorded strong results in 2Q2014, delivering its fourth consecutive quarter of unit cost growth below 2% while posting a 17% improvement in its quarterly profits.
Delta’s overall robust financial performance was driven by gains in its domestic and corporate markets. Despite some concern about overcapacity in the trans-Atlantic during the summer high season, Delta expects solid revenue growth on those routes, and is working with its joint venture partners to reduce capacity in the upcoming winter season to ensure a rational supply-demand balance.
As Delta believes its favourable cost performance will continue and domestic demand remain solid, the airline projects another favourable financial performance in 3Q2014, setting the stage for Delta to deliver on its stated goals of an annual 11% to 15% operating margin and a return on invested capital of more than 15%
It was never a question of if Etihad Airways would report revenue growth in 1H2014; the only question was the exact double-digit percentage by which it would grow. Etihad reports group revenue increased by 28%, a remarkable figure even by fast-paced Gulf standards, and one that stole most headlines. But total revenue has also been positively impacted by Etihad's acquisition of ground-based services.
Passenger revenue grew by a "slower" 14% – below the 19% increase in ASKs, although probably not all that remarkable in the short term with this rate of expansion. Yields, load factor and RPKs (in addition to profit figures) were not disclosed. Possible slowing of momentum comes as Air France-KLM and the Lufthansa Group in a letter to the European Commission accused all Gulf carriers of "excessive growth".
Etihad's acquisition of ground services has clearly helped add diversification to the model, with passenger revenue now comprising only 64% of total group revenue, lower than at Emirates or Lufthansa. Partner revenues are likely to surpass USD1 billion in 2014, but the more significant figure is 1H2014 partner revenue accounting for 23% of total passenger revenue. This too will grow as new partnerships – including major ones with Jet Airways and Alitalia – bed down. Putting planes into the sky is relatively easy; selling their seats is the challenge.
Leaving aside the controversy, Etihad is creating a remarkable new model that continues to grow multi-dimensionally in ways that detractors might be wise to concentrate on – rather than merely accelerating their efforts to rescind change.